Fitch Affirms John Deere Owner Trusts 2012-B & 2013-B
KEY RATING DRIVERS
The affirmations of the class A notes reflect loss coverage levels consistent with the current ratings. As of the June 2015 reporting period, cumulative net losses totaled 9 basis points and 14 basis points for JDOT 2012-B and 2013-B, respectively. Both transactions are performing within their respective initial base case loss proxies. The Stable Outlook for all classes reflects Fitch's expectation for loss coverage and credit enhancement to continue to improve as the transactions amortize.
RATING SENSITIVITIES
Unanticipated increases in the frequency of defaults and loss severity could produce loss levels higher than the current projected base case loss proxies, which would impact available loss coverage. Lower loss coverage could impact ratings and Rating Outlooks, depending on the extent of the decline in coverage. In Fitch's initial review of the transactions, the notes were found to have limited sensitivity to 1.5x and 2.5x higher of Fitch's base case loss expectations. Initial key rating drivers and rating sensitivities are further described in the new issue report published Aug. 27, 2012 for JDOT 2012-B and Aug. 26, 2013 for the JDOT 2013-B presale.
To date, the transactions have exhibited strong performance with losses within Fitch's initial expectations with rising loss coverage and multiple levels. As such, continued strong performance for these transactions would most likely result in stable ratings. Conversely, a material deterioration in performance would have to occur within the asset pools to have potential negative impact on the outstanding ratings.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Fitch's analysis of the Representations and Warranties (R&W) of JDOT 2012-B and JDOT 2013-B can be found in 'John Deere Owner Trust 2012-B - Appendix' and 'John Deere Owner Trust 2013-B - Appendix', respectively. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' dated March 26, 2015.
Fitch has affirmed the following ratings:
John Deere Owner Trust 2012-B
--Class A-3 at 'AAAsf'; Outlook Stable;
--Class A-4 at 'AAAsf'; Outlook Stable.
John Deere Owner Trust 2013-B
--Class A-3 at 'AAAsf'; Outlook Stable;
--Class A-4 at 'AAAsf'; Outlook Stable.
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